Legal Guide to Real Estate Investment in Thailand

Understand the main legal rules before purchasing land, a villa, a condominium or developing a tourism project in Thailand.

Investing in Thailand with confidence

Thailand attracts many international investors every year thanks to its exceptional lifestyle, dynamic tourism sector and real estate development potential.

The islands of Trat Province, particularly Koh Chang, Koh Kood and Koh Mak, offer opportunities in resorts, villas, tourism developments and land investments.

However, the regulations applicable to foreign investors differ significantly from those commonly encountered in Europe. It is therefore essential to define an appropriate legal structure before any acquisition, construction project or commercial operation.

Land acquisition

Can a foreigner directly purchase land?

As a general rule, a foreign national cannot freely own land in Thailand.

Certain legal exceptions exist, but they are strictly regulated. For most real estate projects, alternative legal mechanisms are therefore considered.

Long-term lease — Leasehold

A long-term lease is one of the mechanisms commonly used when a foreign investor wishes to secure the use of land in Thailand.

A standard real estate lease may be registered with the Land Office for a period of up to 30 years. Renewal mechanisms may be included in the agreement, but they should be reviewed carefully and should not be considered an automatic guarantee.

Leasehold structures are commonly used for:

• Private villas
• Bungalows
• Resorts
• Hotels
• Restaurants
• Land intended for real estate development

Right of Superficies

The right of superficies allows ownership of the land and ownership of the buildings to be legally separated.

The land may therefore remain the property of the landowner while the villa, house, bungalows or other structures may belong to the holder of the superficies right, subject to the terms set out in the registered deed.

This mechanism may be particularly relevant for:

• Villas
• Second homes
• Bungalow developments
• Resorts
• Hotel developments

Usufruct

A usufruct may allow a person to use property belonging to another party and, depending on the agreed terms, receive income or benefits generated by that property.

It may be considered for:

• A private residence
• A rental project
• Family estate planning

Buying a house or villa

Ownership of a building and ownership of the land on which it is located should be analysed separately.

Depending on the legal structure chosen and the documents registered, a foreign investor may hold rights over a building while the land remains owned by another party.

For this reason, leasehold and superficies structures are frequently considered for residential and tourism-related projects.

Buying a condominium

A condominium is one of the most accessible forms of real estate ownership for foreign investors in Thailand.

Subject to the applicable legal conditions, a foreigner may own a condominium unit in freehold within a registered condominium building. Foreign ownership is limited to 49% of the total unit area of the building.

The main points to verify include:

• Available foreign ownership quota
• Origin of the purchase funds
• Documents required for the transfer
• Title deed of the condominium unit

Developing a resort or tourism project

Trat Province offers opportunities for several types of tourism developments:

• Resorts
• Eco-lodges
• Boutique hotels
• Bungalow villages
• Villas intended for holiday rentals

Tourism operations

Holiday villas, bungalows, guesthouses, resorts and hotels may be subject to different administrative rules and licensing requirements depending on their size and operating model.

These aspects should be reviewed before starting the business in order to determine which permits and licences may be required.

Restaurant, café or bar

Operating a restaurant or hospitality business may notably require:

• Business registration
• Tax registration
• Compliant accounting
• Compliance with health and hygiene regulations
• Specific licences depending on the activity

Setting up a company in Thailand

A Thai company may be relevant for operating certain commercial, tourism or real estate projects.

A company may notably be used to:

• Operate a resort
• Manage a tourism activity
• Develop a real estate project
• Operate a commercial business

Employing staff

A tourism or hotel project must also comply with Thai employment and labour regulations.

• Employment contracts
• Administrative declarations
• Social security
• Applicable minimum wage
• Visas and work permits for foreign employees

Taxation

Tax consequences vary depending on the legal structure, the type of property and the nature of the activity.

The following may notably apply:

• Transfer fees and taxes
• Land and property taxation
• Taxation of rental income
• Corporate income tax
• VAT where applicable

A prior tax review is recommended for any significant investment project.

Why invest in Trat Province?

Investor support

Xano Real Estate assists investors wishing to develop a project in Trat Province.

• Land sourcing
• Villa and property sourcing
• Resort opportunities
• Tourism development opportunities
• Coordination with local professionals

Areas covered:
Koh Chang • Koh Kood • Koh Mak • Koh Wai • Koh Rang • Koh Kham • Koh Ngam • Koh Laoya • Koh Kradat • Koh Rayang • Koh Mai Si • Koh Phrao and more broadly throughout Trat Province.

Would you like to invest in Thailand?

Tell us about your project so that we can identify opportunities that match your objectives.

The information provided on this page is for general informational purposes only. It does not constitute legal, tax or financial advice. Thai regulations may change and each investment project has its own specific characteristics. Any investment structure should therefore be reviewed by a qualified lawyer in Thailand and, where appropriate, by a tax professional.